Alan Fram
Senate rejects GOP, Dem plans on student loans
WASHINGTON (AP) — The Senate rejected dueling Democratic and Republican plans on Thursday for averting a July 1 doubling of interest rates on federal college loans for 7.4 million students, pushing back efforts to resolve the election-season showdown until next month.
In mostly party-line roll calls, senators voted 62-34 against the GOP package and 51-43 for the Democratic version, with each falling short of the 60 votes needed for approval. Though both defeats were preordained, the twin votes gave lawmakers from each party a chance to show they favor easing students’ financial burdens — and potential grist for campaign ads accusing the other side of opposing the effort.
The Senate planned to leave town later Thursday for a Memorial Day recess running through next week. Neither party wants to be accused of letting the interest rates grow at a time when voters are focused on coping in today’s rough-edged economy, giving each side an incentive to eventually strike a compromise.
A 2007 law gradually reduced interest rates on subsidized Stafford loans for low- and middle-income undergraduates to 3.4 percent. To save money, it mandated that rates return to 6.8 percent for new loans as of July 1.
President Barack Obama has made preventing a rate increase a priority and has appeared at colleges and on television talk shows to promote it. Though some Republicans expressed early concerns that retaining the lower rate would fuel college tuition increases, likely GOP presidential candidate Mitt Romney endorsed freezing the rate and most GOP lawmakers have done the same.
Ten conservative GOP senators opposed their own party’s proposal, with some expressing concerns about budget costs and saying the loan market should set its own prices.
Both measures rejected Thursday would delay the interest rate increase for a year at a cost of $6 billion, but each side’s bill was paid for in a way the other couldn’t tolerate. Democrats proposed raising Social Security and Medicare payroll taxes on high-earning owners of some privately held companies and professional practices, while Republicans would abolish an Obama preventive health program.
That idea drew a White House veto threat when Republicans used it to pay for their House-passed bill in April.
“The Republican proposal is paid for by stripping Americans of lifesaving preventive health care,” said Senate Majority Leader Harry Reid of Nevada, adding, “It would be a shame” to do that.
Senate Minority Leader Mitch McConnell of Kentucky argued that the Democratic plan showed they wanted “a scapegoat more than a solution” because they knew Republicans would oppose its tax provision.
He also tried goading Obama, saying, “If the president’s got time to run around to late-night comedy shows and college campuses talking about this issue, then he can pick up the phone and work out a solution.”
The Education Department expects 7.4 million undergraduates to borrow subsidized Stafford loans next year averaging $4,226. Doubled interest rates would add around $1,000 in costs, which for the typical loan taking 12 years to repay would mean less than $10 monthly in added expense.
The Federal Reserve Bank of New York estimates that at least 37 million Americans owe $870 billion for outstanding student loans, a figure that is growing and that exceeds the money owed for credit cards or auto loans. Four in 10 people under age 40 owe money for a college loan, the bank says.
Congressional GOP pushes for action on taxes
WASHINGTON (AP) — Republican lawmakers intensified their efforts on Thursday to get quick congressional action on heading off automatic tax increases and revamping the federal tax code.
In a letter to Senate Majority Leader Harry Reid, D-Nev., 41 Senate Republicans said they wanted a vote this summer — before the November elections — on preventing tax increases that will take effect Jan. 1 unless Congress acts. Those increases would be a result of the expiration of tax cuts enacted under President George W. Bush and would affect people across all income levels.
Continue Reading CloseDems, GOP using popular bills to hurt other party
WASHINGTON (AP) — Congress is producing little this election year that will become law, yet both parties are churning out bills designed to make the other side look bad.
Take a look at separate measures that would protect women from violence, keep student loan rates low and build roads and bridges. Each is a widely shared goal and seemingly easy to enact. But the proposals are caught in pitched battles, each party adding language that infuriates the other.
As a result, the Democratic-led Senate and Republican-run House are writing legislation that dies right away or is assured of going nowhere in the other chamber. Instead of laws, the bills generate grist for fundraising pitches and campaign attack ads.
Continue Reading CloseWhite House pressures GOP on student loan bill
FILE - In this March 13, 2012, file photo Sen. Jack Reed, D-R.I., joins students at a Capitol Hill news conference to announce the collection of over 130,000 letters to Congress to prevent student loan interest rates from doubling this July. With Congress returning from a weeklong spring recess, the Senate plans to vote Tuesday, May 8, on whether to start debating a Democratic plan to keep college loan interest rates for 7.4 million students from doubling. The $6 billion bill would be paid for by collecting more Social Security and Medicare payroll taxes from high-earning owners of some privately held corporations. (AP Photo/Manuel Balce Ceneta, File)(Credit: AP) WASHINGTON (AP) — The White House pressed Republicans Monday to back Democratic legislation preventing interest rates on federal student loans from doubling in July as the two parties remained deadlocked over how to pay for the move.
“As the economy continues to recover, and at a time when market interest rates are at historic lows, students who rely on loans to finance postsecondary education should not be burdened with additional college debt,” the White House said.
The statement, which seemed aimed at raising the discomfort level among GOP senators, came as the Senate debated a $6 billion Democratic bill keeping today’s subsidized Stafford loan interest rates of 3.4 percent from doubling for another year.
Continue Reading CloseWhite House threatens to veto student loan bill
House Minority Leader Nancy Pelosi of Calif. gestures during her weekly a news conference on Capitol Hill in Washington, Thursday, April 26, 2012. (AP Photo/Jacquelyn Martin)(Credit: AP) WASHINGTON (AP) — The White House has threatened to veto a Republican bill keeping federal student loan rates from rising this summer.
A White House statement blamed the way the legislation would pay its $5.9 billion costs: by cutting a preventive health fund created under President Barack Obama’s health care overhaul law of 2010.
The White House called those health cuts politically motivated and not a serious response to the problems students face.
The veto threat was issued as the GOP-run House began debating the legislation.
Even if it passes as expected, the measure seems certain to go nowhere in the Democrat-controlled Senate. Democrats want to pay for the measure by boosting payroll taxes paid by high-earning owners of some private firms.
Political battle over student loans heating up
House Speaker John Boehner of Ohio, accompanied by House Education and the Workforce Committee Chairman Rep. John Kline, R-Minn., left, and Rep. Jeb Hensarling, R-Texas, speak about a student loans bill, Wednesday, April 25, 2012, on Capitol Hill in Washington. (AP Photo/Charles Dharapak)(Credit: AP) WASHINGTON (AP) — Democrats and Republicans alike say they want to prevent the cost of federal loans from ballooning for millions of students. But the effort has evolved into an election-year battle each side is using to embarrass the other and spotlight its own priorities to voters.
In the latest political chess move, Speaker John Boehner, R-Ohio, scheduled a House vote for Friday on legislation preventing the 3.4 percent interest rate on subsidized Stafford student loans from doubling as scheduled on July 1. In a bitter pill for Democrats, the measure’s $5.9 billion cost would be paid for with cuts from President Barack Obama’s health care overhaul bill.
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